Will Your Future Include Student Loans? Plan Now...

If there's one thing that most consumers can agree on, it's that student loan debt is awful. Not only is being saddled with student loan debt after college a nightmare, but it's become a nationwide problem. According to the Federal Reserve Bank of New York, total student loan debt in this country is now over $1.3 trillion.

If one of your family members graduated from college in 2016 with a student loan-financed education, they would probably owe approximately $37,000, with average monthly payments of around $351. If you'd like to avoid this for your loved ones, you'll need to plan ahead. Here are the steps you can take to plan ahead for college and avoiding costly debt.

1. Start Saving as Early as Possible

You can't begin saving for college early enough. When you get home from the hospital with that bundle of joy, enjoy the moment. Once you've settled into your routine of feedings, changings, and naps, it's time to start looking at college savings plans. We're not kidding. The sooner you start, the lower the cost.

2. Invest in Pre-paid College Plans

Fortunately, many states have established what are called pre-paid college savings plans. These are 529 Plans, where you lock in tuition and housing fees and then pay for the total cost over a number of years. If you set up that plan when your child was still in diapers, you'd have 18 years to pay, so the payments would be lower than if you waited until they were in middle school. Not all 529 plans are the same, so it's best to compare plans. The good news is that you don't need to live in a state to invest in or use their plan.

3. Apply for Scholarships and Grants

Student loans have to be repaid, often with high-interest rates attached. Scholarships and grants, on the other hand, are free money. There are many types of both that might align with your child's interests, area of study, or even local community. Apply for as many as possible -- this money can add up and make large loans unnecessary.

4. Consider the Military or a Public Service Career

If you want to avoid student loans altogether but don't have savings, there are several things you can do. The first is to research joining the military and use their GI Bill benefit to finance your education. The second is to investigate careers in public service, where your child could qualify for student loan forgiveness. This second option is never a guarantee, however.

5. Use Available Tax Deductions

Be sure to use all available tax deductions, as this is money coming back into your pocket so that you can turn around and use it for the next semester's expenses. For example, up to $4,000 of tuition paid is tax deductible.

6. Be a Thrifty Student

Explore options for receiving college credits through the College-Level Examination Program (CLEP®) with the CollegeBoard. Accepted by 2,900 colleges and universities students can earn credit by taking examinations on 33 topics at a fraction of the cost of tuition.

7. Be a Smart and Frugal Shopper

If you must take out student loans, try to limit the amount that you have to borrow by doing several things. The first is to shop carefully for your loans, as private student loans will have higher interest rates than government-backed loans. The second is to have your child live a thrifty lifestyle while in school. There's nothing wrong with having a job while getting an education, especially if it will keep you out of debt later.

Knowledge is power. The more you know, the easier it is to make an intelligent choice. Everyday life, as well as certain events and circumstances, require you to make choices. And peace of mind is gained when you feel good about the decisions you make.

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